Gaining Ground

Higher Education

Another series of recommendations in Gaining Ground would improve Texas' diverse array of institutions of higher education. We've said before that the state's higher education system is one of the best values of its kind anywhere in the nation. It saves taxpayers a bundle, too, in social, criminal justice and other expenses that are not incurred when young people increase their earning power and personal fulfillment.

Guaranteeing college tuition. One of the major problems for parents who want to save for their children's college education is that no one can say with certainty how much they ought to put aside. What seems like an adequate amount today may well turn out to be inadequate by tomorrow, when a child heads out the door to begin his or her college career. Even with that, saving up for tuition expenses is still likely to cover only a portion of the costs for a young Texan's higher education. And students who borrow heavily for college face years of loan repayments, a fact that discourages many from pursuing their education, which in turn costs the state in lost productivity and individual earnings.

TPR proposes the Texas Tomorrow Fund, a guaranteed prepaid tuition plan for Texans to attend public colleges or universities. In essence, the self-funded plan should provide Texans with a college savings strategy and an insurance policy against rising tuition fees at two-year and four-year schools, as well as a two-plus-two year plan for those who attend two years of community college and then transfer to a university.

Under the direction of the Comptroller, families should be allowed to "contract" for two or four years of their children's future higher education at today's prices, with the money deposited in a special account, which could then be pooled with other state assets for investment purposes.

In conjunction with this proposal, the Legislature should establish a scholarship program to benefit needy Texas students through a public-private partnership. Disadvantaged students who stay in school and graduate should receive tuition contracts in much the same way as private projects such as "I Have a Dream" projects award tuition for inner-city youths.

Offering incentive funds to colleges and universities. While Texas families are scrimping and saving through the years to send their kids to college, they deserve to know that higher education schools will maintain their traditional excellence. But there's growing evidence of a general decline in academic standards as colleges and universities feel the pressure to recruit, retain and graduate increasing numbers of students.

The state's funding formulas contribute to the problem with what at least one scholar has called "perverse incentives" that reward student enrollment at the expense of performance and quality. This enrollment-driven funding tempts schools to inflate their students' grades even as their achievement levels drop.

TPR recommends that the Legislature reserve 5 percent of the state's total appropriation for Texas colleges and universities so that the Coordinating Board can reward individual campuses that meet agreed-upon standards. Incentives would inject a performance element into higher-ed's funding formulas and help guarantee that Texas families saving for their children's education are putting the money into institutions that preserve the highest academic excellence.

Making higher education money available monthly. Texas public schools receive their state funds in monthly installments. The Foundation School Program allows property-poor districts to get more of their aid early in the year, while property-rich districts wait until later in the year. But this logical schedule for distribut-ing education funds has never been applied to higher education.

On the first day of each new fiscal year, the state's annual general revenue appropriation for public universities becomes available. Higher education institutions then spend the state money before tapping into their other funding sources, which are left to earn interest until much later in the year.

State law should be changed to require that a public university's annual general revenue appropriation be made in 12 monthly installments. This would allow Texas to keep the funds in interest-bearing accounts longer, earning almost $26 million in extra state income over the next five years.

Linking public schools and community colleges. We've repeatedly called for breaking down the barriers that currently preclude the various segments of public education in Texas from working together as a seamless system. In Forces of Change, we suggested moving toward a merger of the Texas Education Agency, which oversees primary and secondary schools, and the Texas Higher Education Coordinating Board, which does the same for colleges and universities.

TPR recommends that the Legislature develop a statewide program for high school students to receive concurrent credit. The program should be structured so that concurrently enrolled students draw an incentive funding weight from the state. This allocation should be distributed according to a formula providing a percentage to high schools for administration and counseling, with the remainder going to high schools and higher education institutions to cover instruction and textbook costs.

Cutting the cost of underused facilities. Finally, public colleges and universities owe Texas taxpayers the assurance that they're using their facilities wisely. State universities occupy more than 36 million square feet of space, which is paid for from taxpayers funds, student fees, federal grants and other sources. That represents a huge investment.

TPR recommends that the Coordinating Board revise its funding formula for university plant operations and maintenance to reflect the degree to which campuses may be over built. This change would transfer resources to frequently used facilities and cut the costs of maintaining underused buildings -- saving taxpayers nearly $15 million between now and the year 2000.